An extended slump in grain and oilseed prices is unlikely to end anytime soon, posing myriad risks for U.S. farmers. But also presenting opportunities to diversify and latch onto an innovation wave driven by the push for renewable energy and sustainability, agricultural economist Mac Marshall said.

“I don’t see a lot of potential upside for prices for the next two to three growing seasons,” Marshall said during opening day at the 2024 Farm Progress Show.

“We’re in a downcycle for agriculture where we have a lot of surplus production,” said Marshall, a former economist with the United Soybean Board, who’s a principal at Balcony View Consulting LLC. Marshall made his remarks at a Farm Progress exhibit sponsored by Pivot Bio, a sustainable ag company that makes crop technology aimed at reducing nitrogen runoff.

China’s scaled-back purchases of U.S. beans and stepped-up competition from South America are among the factors weighing on soybean prices. Marshall noted Brazil has expanded soybean acreage nearly every year for the past two decades. USDA’s forecasts Brazil will harvest 169 million metric tons of soybeans in 2025, up 10% from 2024.

Resilience through diversification

Meanwhile, U.S. farmers are bracing for a sharp drop in income for the second year in a row as record or near-record harvests contribute to swelling global supplies. Both corn and soybean prices are trading at roughly half the 2022 peaks, which were driven in part by global grain market disruptions following Russia’s invasion of Ukraine.

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November soybean futures closed at $9.8075 Tuesday, down 20% from 2024’s high of $12.30 in early May. December corn settled at $3.865, after trading just under $5 in May.

But Marshall said the silver lining in down markets are the opportunities to build “resilience through diversification.”

“When a market dries up, you have to look for other ones,” Marshall said.

“Farmers need to think about the end-markets for what they produce and think about the types of on-farm decisions they could make that could position them to participate” in an evolving marketplace and economy, Marshall said. These decisions may involve “climate-smart” practices aimed at reducing greenhouse gas emissions.

“Farmers have an opportunity to participate in decarbonizing the economy,” he said. “What can you do most efficiently with your inputs to tailor or optimize what you’re doing and help you de-risk? It’s important to have a sharper eye on cost management, as well as downstream markets you might be selling into.”

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Marshall cited renewable diesel and sustainable aviation fuel, both of which can be derived from crops or crop waste, as two examples of growing markets. The “next wave of innovation,” he added, is in bioplastics and other means of petroleum replacement.

Watching for next “big whale”

While there may appear to be no end in sight for depressed prices, Marshall said he’s keeping eyes open for a “big whale” type of geopolitical development that could catalyze the next market upswing and hold potential to be “seismic” in terms of demand.

Global agriculture may be near an “inflection point,” Marshall said. That said, he asked: “How do we utilize current circumstances to set up for when we do see the inevitable rebound in a couple of seasons?”

“Producing for volume still matters,” Marshall said. “But the surplus-oriented production model we’ve had for the past 70 to 80 years may not be the best way forward.”

“We need to start looking at more value-add markets out there. We want to get to a place where farmers can capture more value and be recognized for what they produce.”